Former JPMorgan Vice President Alleges Money Laundering Cover-Up

JPMorgan Chase World Headquarters in New York (Michael Premo on Flickr)

Last Friday, JPMorgan successfully got a whistleblower lawsuit from former JPMorgan vice president Jennifer Sharkey tossed out of federal court by claiming that Sharkey’s termination was related to her performance and not due to her drawing attention to possible criminal activity of a JPMorgan client.

Sharkey is a former vice president at JPMorgan’s Private Wealth Management group and alleges that she was fired after raising concerns with superiors in 2009 about an unnamed Israeli client who was engaging in fraud and money laundering related to activities in the country of Columbia. The unnamed client was, according to court papers, making suspicious cash transfers and hiding the true ownership of different bank accounts.

That accusation certainly seems to be credible given that it was also in 2009 that JPMorgan was being scrutinized – and would later be penalized – for the company’s involvement in Bernie Madoff’s multi-billion dollar Ponzi scheme. JPMorgan willingly allowed criminal conduct using its financial services by Bernie Madoff and paid over $2 billion in fines for doing so.

There has been considerable back and forth about the case concerning whether Sharkey technically qualifies as a whistleblower under the 2002 Sarbanes-Oxley Act. Sharkey’s whistleblower suit was first dismissed in 2013 for not meeting the Sarbanes-Oxley requirements. After the 2nd U.S. Circuit Court of Appeals imposed a lower bar for whistleblower protection under Sarbanes-Oxley in 2014, Sharkey refiled the suit that was eventually dismissed last Friday.

Regardless of whether or not Sharkey is conclusively stymied in court, the question is whether or not JPMorgan pulled another Madoff and once again looked the other way when one of its clients used the bank’s services to break the law. Will we ever know?